Odisha’s VAT reduction on pulses to benefit customers  

Aamir H Kaki

The approval of Odisha government to reduce Value Added Tax (VAT) on pulses from 5% to 1% is welcomed by the industry as it will directly benefit the customers.

Anil Agarwal, Owner, Trupti Dal & Floor Mill, which deals in pulses, said that the traders welcome the government’s decision and the benefit of the VAT reduction will directly go to the customers.

“If we take into account the VAT on pulses, we have to pay extra Rs.8-10 as tax on a kg of tur dal. After tax reduction, this benefit will directly go to customers in terms of reduced prices,” he added.

“The central government has been taking measures to regulate the prices of the pulses, which are at a peak of Rs.200/kg, in the country and urging the traders to bring down the prices,” Agarwal said.

“Even, the traders are also demanding for long to lift the VAT on pulses,” he added.

Agarwal further said that there are 20-22 states which had already lifted VAT on pulses or brought it down to 1-2%. Only a few states, including Odisha, are still levying VAT on pulses.

Another dealer of pulses from Odisha, Pawan Nangalia, Owner of Nangalia Oil Mills, said that the decision of the government to reduce VAT will definitely benefit our trade. It will also help in curbing the illegal trade of pulses that is prevailing in the state due to high prices of edible commodities.

“There is no VAT on pulses in neighbouring states, except Odisha. We have been waiting for the tax reduction for a year and requesting the state government to reduce the VAT on pulses,” Nangalia said. As the tax reduction is for 3 months, we urge the government to reduce the tax permanently,” he added.

The Odisha government on Tuesday approved the reduction of tax rate on all kinds of pulses and dals under OVAT Act, 2004 for a temporary period of three months with effect from July 1 this year, to restore price stability of pulses in the market.

While announcing the decision, Chief Secretary Aditya Prasad Padhi, said that if it does not affect revenue of the state, as claimed by the traders, and the benefits of tax reduction will go to the consumers, then the government would consider extending the relaxation for a longer period.
 
Odisha receives around Rs 45 crore in terms of revenue from these commodities every year, Padhi said.
 
The traders from Odisha were demanding withdrawal of VAT on pulses and other edible items to withstand the competition, as around 22 states have already lifted the tax.